• by Joe Mandese  @mp_joemandese, December 14, 2005

Massive staff reductions have become an increasingly common development for one major print medium--newspapers--and now they may be becoming a factor for another: magazines. Time Inc., the world's largest publisher of consumer magazines, Tuesday announced a restructuring of its business operations--laying off 105 employees, including high-profile managers such as corporate Ad Sales Chief Jack Haire, Time magazine President Eileen Naughton, and Richard Atkinson, executive vice president in charge of Time Inc.'s news and information group. But unlike the staff reductions taking place at major newspapers such as The New York Times and The Los Angeles Times, the Time Inc. cuts are mainly on the business side. Less than 20 of Time Inc. layoffs affect its editorial department.

Nonetheless, the restructuring of Time Inc. is another telling sign of the pressures confronting print media as publishers try to make the transition to a digital publishing world--and the shift of advertising budgets toward digital media, especially online. Major Time Inc. titles have experienced significant ad page erosion during 2005. Pages in flagship Time magazine have fallen 14.2 percent through the first 11 months of 2005 versus the same period in 2004. Sports Illustrated is down 18.5 percent, Fortune is down 10.3 percent, Entertainment Weekly is down 6.4 percent, and Money is down 2.1 percent, according to the Publishers Information Bureau. Among Time Inc.'s major titles, only People (up 6.9 percent), In Style (up 5.0 percent), and Real Simple (up 15.6 percent) are posting healthy ad pages gains.

Moreover, big magazines including Time Inc.'s are facing tough negotiations with media buyers for 2006 calendar year deals, which are dragging on--and are expecting that this will be the third consecutive year of either flat rates or decreases, placing even greater pressure on margins as paper and production costs continue to rise.

Time Inc. Chairman-CEO Ann Moore acknowledged that the restructuring was designed to reduce Time Inc.'s costs, but said it was also intended to "simplify" its organizational structure and speed up its decision-making process--implying that at least part of that is related to the shift toward digital media. "We are reallocating our workload and assets in order to invest in areas of higher growth, including online and new launches," she stated.

The shift toward a digital media marketplace, meanwhile, also continues to impact major newspaper publishers. Gannett Tuesday announced that flagship USA Today would merge the newsroom operations of its printed paper and its USAToday.com Web site. While no staff reductions were announced as part of the reorganization, USAToday.com Vice President-Editor in Chief Kinsey Wilson was promoted to executive editor of USA Today, joining current Executive Editor John Hillkirk in that role.